Daido Steel Co. will buy a 10 percent stake in Sunflag Iron & Steel Co. for around ¥1 billion in late August as it expands operations in India's fast-growing automobile market.
Nagoya-based Daido said Thursday it would buy the shares via third-party allotment to strengthen ties following a technical assistance partnership the two companies struck in November 2010.
Since then, Daido has been providing advice on capital investment and has supported Sunflag, which owns its mines, while supplying Japanese customers.
The Indian specialty steel market is expected to see significant growth amid increasing domestic demand for automobiles and motorcycles, Daido said, adding that it is also likely to grow as an export base for such regions as Europe and Southeast Asia.